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Putin
says Russia prepared
for oil price collapse as more
sanctions threatened
for oil price collapse as more
sanctions threatened
At
G20 summit, Russian president says he regards sanctions over Ukraine
as pointless, illegal and likely to harm world trade
14
November, 2014
Vladimir
Putin has admitted for the first time that he is prepared for his
country to face a “catastrophic” slump in oil prices, as David
Cameron said Europe would have no choice but to step up sanctions if
the Russian president did not abide by previous agreements to respect
Ukraine’s independence.
Putin
was speaking before a bilateral meeting with Cameron on the margins
of the G20 summit in Brisbane. The meeting is likely to be a
bruising affair, especially after the British prime minister likened
Russia to Nazi Germany, saying Europe had learned lessons from
history about how a big country could bully others.
Putin
said Russia’s economy had the reserves to withstand a collapse in
oil revenues, but added: “We are considering all the scenarios
including the so-called catastrophic fall of prices for energy
resources, which is entirely possible and we admit it.”
He
said he regarded sanctions as pointless, illegal and likely to harm
not just Russian but world trade. “This contradicts international
law because sanctions can only be imposed within the framework of
the United Nations and its security council.”
He
claimed that as many as 300,000 German jobs could be at risk if
there were no contracts with Russia. Putin is also due to see Angela
Merkel at the summit.
The
Russian economy is forecast by its central bank to run zero growth
next year, and the value
of the rouble has fallen.
Russia gets half its total budget revenue from oil and natural gas
taxes.
British
government sources are increasingly confident that sanctions
limiting the ability of Russian banks to raise capital are taking
their toll. Britain has been urging the Russians to stand by a
ceasefire agreement signed in Minsk in September and to stop sending
Russian material and arms across the border to rebel-held regions of
Ukraine.
Cameron
told reporters: “It’s possible to stand by the Minsk agreement.
It’s not a perfect agreement from anyone’s point of view, but it
has some key parts to it, about Russian troops and about borders and
about respecting Ukraine’s sovereignty. I think there’s a very
clear choice for Russia of which path it takes. If it takes the
Minsk path we could progressively see normalisation of relations
between Russia and Ukraine, you could see Ukraine’s sovereignty
and elections respected, you could see the removal of sanctions if
that were to happen.
“But
the other path of not respecting the Minsk agreement, continuing to
undermine Ukrainian sovereignty, continuing to see Russian troops in
Ukraine and Russian tanks and the rest of it – I don’t think
Europe would have a choice but to maintain the sanctions we have, to
start looking at further measures that could be taken if Russia
takes further steps, and to putting relationships between European
countries and Russia on a very different basis.”
Earlier,
Cameron said: “We have to be clear what we are dealing with here
is a large state bullying a smaller state. We have seen the
consequences of that in the past and we should learn the lessons of
history and make sure we do not let it happen again. I don’t think
there is a military solution to this, but the sanctions have had
some effect. You can see that in what has happened to the Russian
rouble, what has happened to the Russian stock market and the
difficulty the Russian banks have in gaining finance.”
The
Australian prime minister and G20 host, Tony Abbott, has been at the
forefront of the criticism of Putin. It is thought that 38
Australians were among the 298 people killed on flight MH17, the
civilian plane shot down over Ukraine in July. Such is the anger in
Australia that there were protests against Putin outside his hotel
in Brisbane.
Australia
sent three ships to its northern coast after a flotilla of Russian
navy vessels appeared there this week.
Abbott
said: “It is our clear understanding on the evidence so far this
plane was clearly shot down by Russian-backed rebels most likely
using Russian-supplied equipment. I think there is heavy
responsibility on Russia to come clean and to atone.
“It
is part of a regrettable pattern, whether it is the bullying of
Ukraine, the increasing number of Russian military aircraft flying
into the airspace of Japan, European countries or the task
group in the South Pacific.
Russia would be so much more attractive if it was aspiring to be a
superpower for peace and freedom and prosperity, if it were trying
to be a superpower for ideas and values, instead of trying to
recreate the lost glories of tsarism or the old Soviet Union.”
The
two summits in Brisbane ending on Sunday had originally been
intended by Australia to focus on job creation, improved growth and
unblocking barriers to trade deals between the US and EU.
The
issue of climate change given a new momentum by the China-US deal is
also likely to feature as Australia battle to keep the agenda
manageable.
But
the Australians are also keen to pick up initiatives to clamp down
on corporate tax avoidance by shaking up a creaking international
tax system that is unfit to tackle multinationals capable of
shifting profits to low-tax jurisdictions.
Cameron
made tax transparency a big theme of the British G8 presidency last
year and said on Friday that 90 countries had now agreed to
cooperate on sharing tax information in line with guidelines set out
by the OECD, the international body charged with modernising the
international tax system.
He
added he “damn well expected” companies to pay corporation tax
in full in the UK adding the conversation and culture was changing
in boardrooms worldwide as executives realised they had to run
defensible policies on paying tax.
Cameron
believes the culture change is being driven by popular anger
directed at companies caught avoiding taxes, but also by
unprecedented levels of cooperation between tax jurisdictions
threatening to expose the way company accountants try to transfer
profits to low-tax jurisdictions.
But
Cameron held off from directly criticising the new European
commission president, Jean-Claude Juncker, over claims that he had
for decades overseen a regime as Luxembourg prime minister designed
to lure companies to base operations in the low-tax country.
Cameron
has tried to block Juncker’s appointment as Commission President
in the summer, largely due to his federalist views, but faced by
other battles on the European stage Cameron refused to directly join
the call for Juncker to quit after it had been shown he had designed
an effective tax haven in Luxembourg in the centre of Europe.
Cameron
may feel as he prepares for potential renegotiations over Britain’s
relationship with the EU that he cannot afford to confront Juncker,
preferring instead to stress the moral case for companies to pay tax
.
The
Juncker assault had been given new impetus by a leak of a mass of
documents showing the scale of the tax avoidance practised in
Luxembourg at a time when Juncker had been prime minister.
Cameron
said: “We have a very strong moral case to make now. When you have
a 20% corporation tax rate, we damn well expect you to pay it. The
culture is changing across the boardrooms round the world – they
are having a lot of discussions about whether their strategy over
tax is responsible and defensible.”
‘Economic isolation breach of intl law': Top 5 takeaways from Putin ahead of G20
RT,
14 November, 2014
Vladimir
Putin says the G20 must address global imbalances together, and
economic isolation, especially in the case of sanctions, which not
only leads nowhere but is a crude violation of international economic
law.
Here
are the Russian president’s top takeaways he gave in an interview
to TASS ahead of the G20 summit being held in Brisbane, Australia
from November 14-15.
G20
great for ground work, but decisions often just hot air
Putin
believes the G20 is still a good and relevant platform for world
leaders, however, decisions at the summit are often nothing but
words. Decisions made there are only carried out when there are in
line with the interests of certain global players, like the US.
Decisions
are neglected if they don’t fit the agenda of an individual power.
An
example is when US Congress blocked the IMF quota, which was intended
to enhance the role of developing economies and redistribute quotes.
That move was counterproductive, Putin said.
“The
very fact that US Congress has refused to pass this law indicates
that it is the United States that drops out of the general context of
resolving the problems facing the international community," the
president said.
“Everyone
must understand that the global economy and finance these days are
exceptionally dependent on each other,” he
said.
US
sanctions violate the very system they created
Sanctions
levied against Russia are against the norms of international trade
and the core principles of the G20, as they can only be introduced
via the United Nations, Putin said.
Sanctions
are “against WTO
principles and the General Agreement on Tariffs and Trade, the GATT.
The United States itself created that organization at a certain
point. Now it is crudely violating its principles,”Putin
explained.
Interconnected
economy: What hurts us hurts you
Sanctions
against Russia have targeted the finance, energy and weaponry sectors
of the economy. Russia’s retaliatory sanctions to ban agricultural
imports are having a colossal ripple effect on jobs, social sectors,
and growth.
This
is especially pertinent to Europe, which is feeling the squeeze of
the agricultural export ban to Russia, one its biggest markets.
“"Everyone
must understand that the global economy and finance these days are
exceptionally dependent on each other,” Putin said.
Germany’s
economic growth is an example of financial blowback from sanctions
with Russia.
US-led
trade pacts will create global imbalance
Putin
believes that the creation of the 2 US-led trade pacts - one
Transatlantic and the other Transpacific - will only create more
global imbalance. The US-led Trans-Pacific Partnership (TPP) doesn’t
include China or Russia.
"Of
course, we want to get rid of such imbalances, we want to work
together, but this can be achieved only through joint efforts,”
Putin said.
New
economic associations should complement existing institutions
All
new emerging economic blocks like BRICS and the so-called ‘new G7’,
which in addition to Brazil, Russia, India and China also includes
Indonesia, Turkey and Mexico, should come as something complementary
to the existing groups, Putin said.
According
to purchasing power parity (PPP) BRICS nations have a combined GDP
$37.4 trillion, more than the G7’s at $34.7 trillion, Putin said.
However, its economic girth doesn't give it the right to start
running its own polic
“And
if we go and say, ‘No, thank you, we are going to do this and that
here on our own, and you can do it the way you want it,’ this will
only add to the imbalances,” Putin warned.
The
Russian president also said that all regional integrations like the
Russia-led Eurasian Economic Union with Belarus and Kazakhstan
shouldn't isolate, but complement, global institutions.
Putin
descends on G20 mid
Cold War MSM panic
The
leaders of G20 member states arrive in Australia on the eve of this
year's summit - with divisions between the political heavyweights
looking wider than ever
Closed G20: Brisbane
becomes ghost town while
hosting summit
Brisbane resembles a ghost town ahead of the G20 summit, Friday. Stores operated on reduced hours or were closed for business until the G20 leaves town.
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